SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING

Published, Fall 2001

       By Gerri Rice

       In recent years, new vehicles for Native American economic development have slowly gained recognition. Borrego Springs Bank (BSB) is one of them. Established in 1982, BSB is the first Native American-owned, federally chartered bank in California and one of six in the entire country. Our goal, through providing banking services to Native American tribes, is to assist with the development of economic opportunities, finance tribal government projects, and support legislation that will further assist their economic development.

       After extensive negotiations with shareholders and banking regulatory agencies, the Viejas Tribe of Kumeyaay Indians became the majority shareholder of BSB on Christmas Eve in 1996, and later injected additional capital to increase BSB’s operations and outreach. Our Board includes members of the Viejas Tribe as well as other local tribes such as Sycuan and business leaders, which enables us to effectively address the banking challenges specific to our Native American communities.

       In the past, Native American communities have been severely under-served by the banking sector. One explanation is that many financial institutions have been unfamiliar with the internal workings of tribal government. Tribes, as sovereign governments, are recognized by the U.S. Government in a similar fashion to state governments, with power to legislate and enforce laws within their reservations. However, tribal communities are slowly gaining more economic independence as Native American-owned business continues to grow. According to the Census Bureau, the number of American Indian and Alaskan Native-owned businesses, excluding C-corporations, rose 84 percent from 1992 to 1997.

       Through participation with Federal Agencies such as the U. S. Small Business Administration, the Bureau of Indian Affairs and U.S. Department of Agriculture, we offer additional lending programs to enhance business development. For the last three years, BSB has been ranked by the Coleman Report among the top 50 lenders in the nation making loans through the U.S. Small Business Administration.

       One of our most recent policy engagements is related to the Intertribal Revenue Sharing Program. This tribal-state compact sets aside a percentage of the revenue from the California Indian casinos proceeds and distributes it to tribal governments not involved in gaming. This program has helped numerous non-gaming tribes develop businesses on their reservations, such as housing projects and retail operations. For example, the Los Coyotes tribe was only able to bring electricity to the entire reservation through the generosity of San Diego’s three gaming tribes and the new revenue sharing generated by all the gaming tribes in the state. Mr. Riolo, president of Borrego Springs Bank, along with Anthony Pico, Director, have worked diligently advising tribal councils and members of the opportunities of this program.

       Environmental issues such as environmental management of land and water resources have been historically an important tradition for the Kumeyaay people. So, as part of our business operations, we have established an environmental committee, engaging BSB Board members and bank management to support energy conservation, waste management and business relationships with companies that share our environmental concerns. We also offer our employees a socially responsible 401k fund researched by the committee.

       We are proud that BSB truly bridges the gap between traditional banking services and the Native American communities’ banking needs. By understanding the intricacies of the legal and political issues of Indian Country and by directly supporting their economic development, BSB is enhancing their quality of life and fostering greater control over their economic destinies.

For more information, please contact Gerri Rice at 619-668-5159 x273 or visit www.borregospringsbank.com.

Through our Community Development Investment Service, Walden clients have invested $7.1 million in community development banks, credit unions, and loan funds. We are pleased to have included Borrego Springs Bank in this service.